USD/CAD drops to its lowest level since June 10
The USD/CAD pair reverses a modest intraday uptick to the 1.2820 region and turns lower for the fourth successive day on Monday. This also marks the fifth day of a negative move in the previous six and drags spot prices to the lowest level since June 10, around the 1.2765 region during the mid-European session. The US dollar is prolonging its post-FOMC downfall and the selling remains unabated on the first day of a new week, which, in turn, is exerting downward pressure on the USD/CAD pair. It is worth recalling that the Fed last week hinted that it could slow the pace of the rate hike campaign at some point.
Furthermore, the disappointing release of the Advance US GDP report last Thursday fueled speculations that the Fed would not hike interest rates as aggressively as previously estimated. This is seen as a key factor that continues to weigh on the greenback. That said, a combination of factors, for now, seems to have eased the bearish pressure surrounding the USD/CAD pair and helped bulls to defend the 100-day SMA. An intraday bounce in the US Treasury bond yields, along with recession fears, offers some support to the safe-haven buck. Worries about an economic downturn, meanwhile, weigh on crude oil prices. This is undermining the commodity-linked loonie and holding back bears from placing fresh bets.
Traders also seem reluctant and might prefer to move on the sidelines ahead of this week's key macro data scheduled at the beginning of a new week. A packed US economic docket kicks off with the release of the ISM Manufacturing PMI on Monday. This, along with the US bond yields and the broader market risk sentiment, would drive the USD demand. Apart from this, oil price dynamics should allow traders to grab short-term opportunities around the USD/CAD pair. The focus, however, would remain on the closely-watched US monthly jobs report - popularly known as NFP on Friday. Traders will further take cues from the simultaneous release of Canadian employment figures. This would play a key role in determining the next leg of a directional move for the USD/CAD pair.
Traders also seem reluctant and might prefer to move on the sidelines ahead of this week's key macro data scheduled at the beginning of a new week. A packed US economic docket kicks off with the release of the ISM Manufacturing PMI on Monday. This, along with the US bond yields and the broader market risk sentiment, would drive the USD demand. Apart from this, oil price dynamics should allow traders to grab short-term opportunities around the USD/CAD pair. The focus, however, would remain on the closely-watched US monthly jobs report - popularly known as NFP on Friday. Traders will further take cues from the simultaneous release of Canadian employment figures. This would play a key role in determining the next leg of a directional move for the USD/CAD pair.